The SAS-2 gamma-ray data is analyzed making use of recent CO line emission and other data for determining the large-scale distribution of galactic gas. A nonuniform distribution of cosmic rays in the galaxy is implied. This fact rules out large trapping halo models and extragalactic origin models. Detailed models of diffusion halos of various sizes perpendicular to the galactic plane are considered. In such models, the scale perpendicular to the plane has a strong effect in determining the radial distribution of cosmic rays. Such radial distributions are calculated for cylindrical coordinate models. The implied gamma-ray longitude distributions are then calculated and compared with the SAS-2 data for goodness-of-fit. Assuming the sources to be supernova remnants or pulsars, cosmic ray nucleon halo models with scale heights greater than 3 kpc are found to provide a poor fit to the gamma-ray longitude data (probability of 6% or less). Thin halo, or source dominated diffusion models are found to provide a good fit to the gamma-ray data, with an upper limit scale height of approximately 3 kpc.